IAB: Online Ad Spending Slows

Growth Could Be Below 10% for the First Time Since 2002

NEW YORK (AdAge.com) -- U.S. online ad revenue was stagnant between the first and second quarters of 2008, indicating a significant mid-year slowdown, according to the latest tally from the Interactive Advertising Bureau.

Second-quarter online ad spending came in at $5.745 billion, a 12.8% increase from the same period last year, but a slight decrease from the $5.765 billion in the first quarter of 2008.

Quarterly online ad revenue has yet to match its last peak, reached in the fourth quarter of 2007, and, if trends hold, several years of double-digit annual online growth are coming to an end.

Based on the first six months, IAB chief Randall Rothenberg still thinks online ad spending is on pace to exceed $23 billion, which would be an 8.5% increase from 2007. In the past two years the second half accounted for 53% of overall spending.

Lower forecast
The new IAB numbers come as Lehman/Barclays analyst Doug Anmuth knocked a few billion off of his 2008 online ad projection to $24.79 billion from his previous estimate of $26.17.

The last time U.S. online advertising didn't grow at double-digit rates was the tail end of the last ad recession, in 2002, when online ad spending was down 16% from the year before. Since then, the online ad market grew 21% in 2003, 33% in 2204, 30% in 2005, 35% in 2006 and 26% in 2007.